If you’re planning to start your own small business, you’ll find that there are many hurdles to jump and questions to answer along the way. Here are some of the important things that are worth paying attention to as you move down the path toward financial independence.
First, make sure you choose the right business structure for your model. Practically every new business owner asks himself or herself, “what legal structure will be best suited to my business?” Of course, there is no easy answer, because no single legal structure makes sense in every situation. However, just knowing the importance of getting this aspect of your business right is key to your success. Talk with other business owners you may know, and consider discussing your options with a professional business development consultant. However you go about it, make sure you carefully evaluate the advantages and disadvantages of the different types of business structures before making an informed decision.
Next, make sure you properly fund your new business. This may seem obvious, but it takes money to get a business up and running, and it takes
even more to keep it running. Many new business owners overestimate how far they can stretch their budgets, and underestimate just how much money is needed to get a small company off the ground. Too many potentially-viable businesses never have a chance to succeed because they are not sufficiently funded. Make sure your plan includes enough money to cover your personal expenses while your new business finds its legs. Remember that most new businesses do not turn a profit for quite some time. Explore all of your financing options – from traditional lenders to government microloans – and seek professional help to accurately estimate your startup expenses. It is advisable to use some form of small business accounting software with expense tracking capabilities from the get-go. Expense tracking will allow you to see exactly how much money you’re putting into your business, and where it’s going. This information will help you tremendously as you develop your business strategy, and is indispensable at tax time.
Even if you have a strong financial plan, you can run into serious trouble if you don’t have a good understanding of the legalities of operating your business. New business owners are often flabbergasted when they realize how many actions they need to take in order to start and maintain a legitimate business. Some legal matters, such as reviewing commercial leases, require the assistance of a legal professional. But you may be able to handle other legal issues, such as registering a business name, just fine by yourself. Knowing when to hire an attorney and when to go it alone will save you lots of money and legal headaches down the road. If you pay attention to these critical areas, you will have a much better chance of starting a successful business.